Who’s Going To Pay For the Oil Spill Mess? (Probably) Not Husky.

Cause they (probably) have insurance.

Last week Prince Albert media reported that “Husky would be setting up an insurance claims centre in P.A. to help residents and businesses file for reimbursement”. Residents and business owners were invited to a boardroom at the Prince Albert Travelodge to meet with adjusters of Braemar Adjusting – notably, not with Husky representatives themselves.

A similar Braemar claims centre has been set up in North Battleford.

Braemar Adjusting, which describes itself as a “leading multi-disciplinary engineering and marine consultancy firm offering a broad range of services in loss adjusting, engineering, marine surveying and consultancy to the world’s shipping, insurance and offshore energy industries” is Husky’s insurance adjuster.

What is a Braemar Loss Adjuster?

Their website says the “role of the Loss Adjuster is varied and involves the investigating, managing and negotiating of Energy related insurance claims such as… pipeline failures.”

An Adjuster’s duties include:

“Onsite survey of damage/losses as well as meeting with relevant technical personnel; investigate cause; review of technical documentation, contract & policy interpretation; quantification and valuation of remedial measures; negotiation of settlement; preparation of investigation reports; travel is required to survey damages as well as meet with technical representatives; engaging with both oil companies and local/international insurance companies.”

Put simply, they do their best to ensure that everyone impacted by the pipeline failure – including municipal governments, area residents and business – receive as much compensation as possible.

Just kidding. Can you imagine.

No, let’s face it, their job is to do the opposite. They are there, though they’d never admit it, to mitigate the costs of whoever is paying.

The question is, who is Braemar adjusting for? I don’t think we know that, but it could only be one of two organizations; an insurance company who sold Husky environmental insurance (ie. AIG), or Husky Energy itself.

Either way, I have to wonder why Husky Energy sent a proxy to meet with individuals making claims, instead of their own officials.

If Braemar Adjusters’ client is an insurance company, whose client is Husky, it begs the question: is Husky going to pony up their own cash if their insurance provider refuses to compensate the car washes and laundromats – nevermind the City of Prince Albert and the Province of Saskatchewan?

That would depend, in part, on how the insurance policy is structured. Humor me for a moment, as I speculate that Husky is insured against an environmental disaster.

Regarding the structure of the potential policy: for example, if it is an insurance policy that excludes negligence (cheaper, structured as a way to ensure the oil company takes proper precautions to avoid accidents) may only cover purely accidental or natural causes of a spill.

We still don’t know the cause of this spill, and you may remember Husky clammed up completely on a bunch of things. Since that was a terrible Public Relations move, you can safely assume that decision was driven by Legal.

There’s also this issue regarding monitoring – presumably the insurance company operates under the assumption that the local government follows appropriate regulatory and inspection processes.

Oy.

The implication of a failure to do so could result in one of two scenarios: Husky sues the Saskatchewan government, or their insurance company sues the Saskatchewan government.

While it seems that Husky was not interested in meeting with residents themselves, the City of Prince Albert might be getting slightly more personal treatment.

When I asked the City of PA whether they were dealing with Husky or an insurance company, here was the answer:

“For simplification I would say… the City is filing claims with Husky Energy. Whether it is through their insurance adjuster or directly with Husky, it is Husky that is ultimately footing the bill and doing the final sign-off.”

Yeah I’m not a fan of simplification. So I asked again.

“We are dealing directly with Husky. To date Husky has indicated they will pay for every reasonable* oil spill related expense from the City of Prince Albert.”

Okay.

A news release posted on Wednesday August 10th, 2016, says the “City of Prince Albert has begun its claim process seeking financial remuneration from Husky Energy…on a wide variety of costs including the salaries of City workers and contractors and material costs in constructing two water pipelines as alternative water sources for the City…”

Husky owes them millions of dollars, said Dionne, and fast.

“The City anticipates a 24-hour claim reimbursement from Husky Energy for all City invoices submitted.”

Really.

“The 24 hours is what the City is anticipating in turn-around time to receive reimbursement upon Husky Energy receiving the invoice,” said PA’s communication branch.

“That is the City’s expectation.”

As of today, the City of PA has invoiced Husky for reimbursement of their costs, and will be doing so on an “ongoing basis”… but how has that 24-hour turnaround expectation panned out?

“We are expecting a payment next week.”

Ah.

Remember the 2010 BP oil spill in the Gulf of Mexico?

It settled three months ago.

That 2010 Enbridge oil spill into the Kalamazoo River?

It settled two weeks ago.

Look, it’s not about suggesting Husky shouldn’t have to pay, or pay in a timely manner.

What it is about, however, is taking with a grain a salt the mantra that has been chanted since this started, which goes a bit like, “Husky will pay for everything we tell them they’re going to, and when we tell them to do it.”

*There is the little matter, which nobody is talking about out loud, of whether or not Dionne actually needed to build not one, but two pipelines in the first place. There is also the issue, which more people are talking about and a little louder, of whether or not he needs to start just getting organized to return to the intake, nevermind musing about heating those pipelines all winter. I suspect we’ll hear more about that next week.

 

 

 

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